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Note: Where applicable, use the present value tables provided in APPENDICES 1 and 2 that...

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Finance

Note: Where applicable, use the present value tables provided in APPENDICES 1 and 2 that appear after QUESTION 5. REQUIRED Use the information provided below to answer the following questions: 5.1 If a payback period of less than three years is desired, would the project be acceptable? Motivate your answer by doing the relevant calculations (answer expressed in years, months and days). (4 marks) 5.2 Calculate the Accounting Rate of Return on average investment (expressed to two decimal places). (4 marks) 5.3 Calculate the Net Present Value. (4 marks) 5.4 Calculate the Internal Rate of Return (IRR) of the project, if the net cash flows are R120 000 per year for each of the five years instead of the values stated below. Your answer must include the calculation of two net present values as well as the determination of the IRR expressed to two decimal places. (6 marks) 5.5 Would you recommend the payback period as a technique in capital budgeting and investment appraisal? Motivate your answer. (2 marks

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